CBN outlines Guidelines to recruit 370,000 Youths for farming – The Central Bank of Nigeria on Tuesday released the Non-interest guideline for the Accelerated Agriculture Development Scheme.
The apex bank said in the guideline that the objective of the programme is to engage a minimum of 370,000 youths in agricultural production across the country over the next three years.
It said the move became imperative in order to reduce the high level of unemployment among the youths in the country, guarantee food security and boost the economic diversification agenda of the government.
Under the initiative, the apex bank would promote National food security in each State through sustained interactions among stakeholders in the agricultural value chain.
It would also collaborate with State Governments, and other elevant stakeholders to create jobs in the agricultural sector, with strong focus on crops where States have comparative advantage.
The guideline would also enable the CBN to provide short and medium term funding windows for the implementation of the Scheme.
The guideline stated that the target group would be Nigerian youths within the ages of 18 to 35 years, adding that State Governments would mobilize prospective young farmers with representation from all Senatorial Zones.
To effectively implement the scheme, State Governments and the Federal Capital Territory are to provide agricultural land in contiguous locations in all the senatorial zones.
It said a minimum of 100 hectares per cluster should be provided, while prospective entrepreneurs that meet the eligibility criteria would be grouped into clusters by commodity that would be produced.
The guideline said Primary Financial Institutions would act as agents of the CBN in disbursing the funds to the beneficiaries.
“The PFIs shall purchase the inputs for on-selling to the beneficiaries, using CBN approved non-interest financing contract of Murabaha, Istisna’, at an all-inclusive rate of return of nine per cent per annum
“For the financing of labour, the PFI shall use Service Ijarah or any other appropriate CBN approved contract,” it added.
The guidelines put the financing tenor at six months for grains and broiler production (rice, maize, soy bean); 18 months for cassava; 24 months for egg production and ruminants; and five years for plantation crops among others.
It put the average financing size at N250,000 per hectare for arable crops; N500,000 per unit for livestock; and N1.5m for plantation crops like cocoa, cashew and oil palm.
Meanwhile, the apex bank also released the guideline for the disbursement of Agribusiness/Small and Medium Enterprises Investment fund for Non-interest Financial Institutions.
The fund was set up by the Bankers Committee at its 331st meeting held on February 9, 2017, to improve access to affordable financing for Micro, Small and Medium Enterprises, particularly those operating in the informal sector of the economy.
As a commitment to the successful implementation of the scheme, all Deposit Money Banks, voluntarily agreed to set aside and contribute five per cent of their Profit After Tax annually to finance eligible projects under the scheme
In the guideline, the apex bank directed PFIs to develop operational, credit and accounting framework for the scheme, transfer the financed asset through any of the CBN-approved non-interest financing contracts to the investee company and aintain records of their investment in the appropriate books;
The PFIs are also to conduct due diligence and appraise the applications to be submitted to Special Purpose Vehicle, remit monthly principal settlements to the CBN and retain 2.5 per cent mark-up on the financing and remit 2.5 per cent to the Fund.